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Flare system of the sea oil production platform.
Fearing policy dictates via "random" social media posts, oil investors are said to be demanding "serious guarantees" from the federal government in exchange for their investment in Venezuela, according to the Financial Times.
Donald Trump has made it clear since the capture and removal of President Nicolás Maduro that his primary motivation for the military strike on Venezuela was to gain access to and control over the country's vast oil supply. The infrastructure for extracting that oil, however, is old and in disrepair, requiring extensive work to get it all in working order.
Trump initially claimed the American oil companies would be making investments to help repair and modernize Venezuela's oil infrastructure, but subsequent reports have cast significant doubt on the certainty of that. On Thursday, the Financial Times reported that potential investors are set to demand "strong legal and financial guarantees before they agree to commit capital to Venezuela," at a White House meeting planned for Friday.
Despite Trump's previous assurance that oil companies would be "reimbursed by us, or through revenue," sources close to the matter told the Financial Times that these companies are far from convinced, citing Trump's "erratic policymaking" as a major point of concern.
"No one wants to go in there when a random f—— tweet can change the entire foreign policy of the country," one anonymous energy industry investor told the outlet.
Another source stated that it would be an uphill battle for the Trump administration to secure the support of the largest players in the U.S. oil industry for the Venezuela project, and that it would require considerable effort and time to get things operational.
“There would have to be some serious guarantees from the government to get the big boys back in Venezuela,” the source, a senior executive at a large U.S. energy company, told the Financial Times. “It’s going to take a while to see real investment in the country and then longer to get production up.”
Amos Hochstein, managing partner at investment group TWG Global and a former adviser to for Joe Biden, said that energy companies considering an investment in Trump's project face a decision "fraught with legal, financial and political risk," not least because the clock is ticking on Trump's time in office, and there are no guarantees that a future Democratic president will not shut down the whole enterprise.
“For the next three years these companies will have to put money in and no revenue will come out until much later," Hochstein said. "And at that point Donald Trump will no longer be the president.”
